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[2002] NSWIRComm 325
Industrial Relations Commission (NSW)
2002-11-06
Wright J, Boland J
Original judgment source is linked above.
CITATION : Public Hospital Nurses (State) Award (No. 3), Re [2002] NSWIRComm 325 APPLICANT New South Wales Nurses' Association
PARTIES : RESPONDENT Health Administration Corporation
INTERVENOR Minister for Industrial Relations FILE NUMBER: IRC 6802 of 2001 CORAM: Wright J President; Boland J; Patterson C CATCHWORDS : Award - Wage fixation - Application for variation re increased remuneration and new allowances - Public hospital nurses - Special case - Work value - Whether agreement made in 2000 providing for wage increases precluded additional wage increases being granted by Commission - Whether wage increase justifiable on the basis of nursing shortage and other factors - Economic impact of claim - Interim increase awarded - Interim award varied LEGISLATION CITED : Industrial Relations Act 1996 Workplace Relations Act 1996 (Cth) Broken Hill Commerce and Industry Consent Award, Re [2002] NSWIRComm 252 CASES CITED : Public Hospital Nurses (State) Award, Re (2002) 115 IR 183 Public Hospital Nurses (State) Award (No.2), Re [2002] NSWIRComm 280 HEARING DATES: 06/11/2002; 06/12/2002; 06/13/2002; 06/14/2002; 07/22/2002; 07/23/2002; 07/24/2002; 07/25/2002; 07/26/2002; 07/29/2002; 08/01/2002; 08/02/2002; 08/05/2002; 08/06/2002; 08/07/2002; 08/08/2002; 08/09/2002; 09/12/2002; 09/13/2002; 09/16/2002; 09/17/2002; 09/18/2002; 09/19/2002; 09/20/2002; 09/30/2002; 10/01/2002; 10/02/2002; 10/03/2002; 10/04/2002; 10/08/2002; 10/09/2002; 10/10/2002; 10/21/2002; 11/07/2002; 11/12/2002 DATE OF JUDGMENT: 12/19/2002
APPLICANT: Mr S J Howells of counsel with Ms C M Howell of counsel Solicitor: Ms L Doust R L Whyburn & Associates
RESPONDENT: LEGAL REPRESENTATIVES: Mr R C Kenzie QC and Mr I Taylor of counsel Mr T Craft - Health Administration Corporation
INTERVENOR: The Hon. J W Shaw QC with Ms E Brus of counsel Minister for Industrial Relations
JUDGMENT: - 48 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH
CORAM: Wright J, President Boland J Patterson C
Matter No IRC 6802 of 2001 PUBLIC HOSPITAL NURSES (STATE) AWARD (No. 3)
Application by the New South Wales Nurses' Association for variation Re Increased Remuneration and New Allowances DECISION OF THE COMMISSION [2002] NSW IRComm 325
1 On 17 October 2001 the New South Wales Nurses' Association ("the Association") filed an application to vary the Public Hospital Nurses' (State) Award by: (a) Increasing rates of pay by 15 percent; (b) Introducing the following scale of allowances for registered nurses and enrolled nurses who hold the relevant qualifications:
Hospital certificate or Graduate $40.00 per week Certificate Post graduate diploma or degree (other than a nursing undergraduate degree) $60.00 per week Master's degree or doctorate $75.00 per week
(c) Introducing a lump sum retention allowance of $10,000 for any nurse who completes two years' continuous service in the public health system and a further amount of $5,000 on the completion of each 12 months' service thereafter.
2 The application to vary was, of course, filed before the decision by the Full Bench in Re Public Hospital Nurses (State) Award (2002) 115 IR 183 which dealt with an earlier claim by the Association for a new Award involving changes to allowances and employment conditions ("the Conditions Case"). The Conditions Case concluded on 24 April 2002 and a decision was handed down on 12 June 2002. In that Case the Full Bench made a new Public Hospital Nurses' (State) Interim Award. It would seem to be appropriate that if wages are to be increased the increase should be reflected in a variation to the Interim Award.
3 The grounds and reasons in support of the application to vary included reference to the stressful environment in nursing brought about by nursing shortages; a significant increase in the skill, responsibility and value of the work performed by nurses in public hospitals since 1991 that had not been reflected in nurses' pay; the undervaluation of nurses' work compared with other health professionals.
4 The respondent in the proceedings, the Health Administration Corporation ("HAC"), opposed the Association's application in all respects. The application was also opposed by the Minister for Industrial Relations, intervening pursuant to s 167 of the Industrial Relations Act 1996.
5 The hearing of the Association's wages claim commenced on 11 June 2002 and followed on from proceedings in the Conditions Case. The current proceedings have continued since June over some 35 hearing days. Evidence was received from 40 witnesses. At the completion of the evidence the Commission handed down a Statement on 21 October 2002 designed to focus the parties' attention on a number of issues that the Commission considered needed to be addressed before the matter could proceed further: see Re Public Hospital Nurses (State) Award (No.2) [2002] NSWIRComm 280.
6 In the Statement the parties were directed to: 1. Prepare submissions on the issues referred to in pars [15], [16], [17], [22], [23], (with the possible exception, for the present, of the "economic impact" issue), and if the parties consider it appropriate, par [24], on the basis that those submissions will be heard by the Full Bench on the next hearing day fixed, that is, 28 October, 2002. 2. Prior to that date the parties shall exchange and file a written outline of their submissions.
7 The issues referred to in the nominated paragraphs may be summarised as follows:
8 The parties and intervenor were directed to file and serve a written outline of their submissions relating to the foregoing issues and the Commission sat on 7 and 12 November to hear oral submissions, the earlier dates set, as adverted to in the Statement, having been vacated at the request of the parties. We now address the issues raised in the Statement.
9 On 2 March 2000 the following parties entered into a Memorandum of Understanding:
· The Health and Research Employees' Association of New South Wales
10 The Preamble to the MOU stated: This Memorandum of Understanding (agreement) is a commitment between the parties to progress priority issues for continued reform in the NSW public sector. This agreement provides a cooperative and productive partnership to achieve a coordinated, whole-of-Government approach to improving service delivery to the people of NSW and enhancing the quality of life of employees. This includes taking a balanced approach to economic, social and environmental impacts of these initiatives. The Agreement is premised on the basis that there will be no new salaries or conditions claims arising from negotiation of productivity and efficiency improvements covered by this agreement. Relevant Awards and Enterprise Agreements will incorporate clauses to give effect to this commitment.
11 The MOU provided for the following wage increases totalling 16 per cent:
Date of Effect Percentage Increase 1 January 2000 2% 1 January 2001 2% 1 January 2002 3% 1 January 2003 4% 1 July 2003 5%
12 The MOU also provided for negotiations to occur between the parties in relation to workplace reform at both the sector wide and agency level. The sector wide reforms included such issues as simplification and consolidation of awards and modernising industrial instruments. It was envisaged that the parties at agency level would develop and agree on "reforms and priorities" by 31 March 2000 and implementation strategies for the introduction of agreed improvements would be developed by 30 June 2000. The parties were required to monitor and review the progress of their discussions. The MOU is due to expire on 30 June 2004.
13 Mr S Howells of counsel with Ms C Howell of counsel for the Association submitted that there was no basis for a conclusion that the incidents of work value change upon which it relied for its work value claim were caught by the limitation on claims expressed in the MOU. The main points made for the Association in support of this contention were:
The limitations imposed by the MOU in respect of the making of new wages claims were that there could be no new claims arising from negotiation of productivity and efficiency improvements covered by the MOU. The inquiry, therefore, had to be whether a claim sought to be advanced was based upon productivity or efficiency improvements that were negotiated in accordance with the MOU. There was no evidence as to the negotiations envisaged by the MOU actually occurred or the outcome of those negotiations in terms of improvements to productivity and efficiency. Even if there were productivity and efficiency improvements there was no evidence that these extended to matters underpinning the Association's work value and special case claims. The matters relied upon by the Association in support of its work value and special case claims have not been the subject of negotiations pursuant to the MOU. It could not be said, therefore, that the limitations in the MOU on the making of new wage claims constituted a bar to the Association's claims.
The contentions made by the respondent that the intention of the parties in making the MOU was to preclude any additional general wage increase during the life of the MOU, were not supported by the evidence. No evidence was called either by the respondent or the intervenor from officials involved in the negotiation of the MOU as to its intent.
At the time of the making of the MOU the Association did not give any commitment that it would not make the claims that are the subject of the current application.
Even if at the time of entering into the MOU the Association was aware of the need for increased wages to address the shortage of nurses, it is not unreasonable to suppose that, in the two years since that time the shortage has been exacerbated, it became apparent to the Association that any increases achieved under the MOU were hopelessly inadequate to deal with the problem.
There is no basis for the contention that the MOU impacts upon any aspect of the claim for retention allowances and the claim for qualification allowances.
14 Mr R Kenzie QC with Mr I Taylor of counsel for the HAC submitted in relation to the MOU:
The MOU was intended to be the [only] vehicle by which general pay increases would be obtained during its term.
The MOU, as a multi-union agreement, was a departure from the approach taken in 1996-99 where each health union entered into separate agreements with different outcomes. The MOU was premised on a general acceptance by the union parties as to the appropriateness of the rates at the commencement of the MOU. It would be inconsistent for one party to the MOU to be able to make a general salaries claim during the term of the MOU based on productivity savings obtained either during the life of the MOU or arising from any earlier period which would result in that party obtaining higher wage increases than the other parties.
the MOU gave pre-determined increases in return for efficiencies that would arise from workplace reform, being both reform specifically identified in the agreement and other reforms that would be developed at both a sector-wide and agency level. Such reforms were to deliver savings across the areas of the public sector relevant to the union parties to the agreement, being savings that would fund 6% of the increases. The agreement does not require savings of that magnitude to be found in respect of each sub-group of workers, only that overall savings are to be found. Accordingly, savings obtained in each area can be 'pooled' for the benefit of all. If one group of workers covered by the MOU is sought to be advanced during its term over others then the fundamental basis of the agreement (namely a common outcome based on potentially differential contributions) is removed, destroying the essence of the MOU and leading to catch-up claims by others.
The HAC and the Government were entitled to move on the premise that any agreement reached with the applicant to set wages and conditions for nurses would be adhered to by the parties.
There is the strongest public interest in preserving the integrity of agreements which have been entered into by organisations recognised by the Act as having an entitlement to effectively represent their members. If a party were permitted to revisit, by arbitration, an agreement previously reached, it would make the reaching of agreements much harder because it would fundamentally undermine the basis of conciliation.
The applicant, as such a representative organisation, entered into the 1996 and 2000 agreements for wage increases fully aware of what it was doing and the context in which it was operating, understanding the clear effect of those agreements. 7. There is no doubt that the parties who entered into the MOU did so on the basis that it would represent rates that would generally apply to employees of the HAC. The Applicant entered into the agreement with its "eyes open". Even if it were accepted that the strict terms of the MOU would not prevent some specific classifications being restructured by consent, it cannot be said that the parties to the agreement contemplated that during the life of the MOU it would be possible for a party to seek a general and significant across-the-board increase applying to its members only.
15 The intervenor, represented by the Hon J W Shaw QC and Ms E Brus of counsel, generally supported the position of the HAC in relation to the MOU.
16 Whilst it must be said the drafting of the MOU leaves a great deal to be desired and is a poor reflection of the intent of the parties, we are satisfied the understanding and intent of the parties to the MOU at the time it was made was that the not insubstantial wage increases provided for in the agreement represented a general wage increase for the life of the agreement. Further, it was understood and intended that it would not be open to any party to the agreement during its term to seek a further general increase in wage rates on work value or any other grounds under the Commission's wage fixing principles.
17 It is an untenable proposition, in our opinion, that the parties to the MOU would have negotiated an agreement providing for a level of wage increase for the public sector that is not out of step with general community movements (the MOU provides an average annual increase of 3.6 per cent over 4.5 years) on the basis that the union parties to the agreement were free to pursue further wage increases of the order being sought by the Nurses' Association. It is worth noting in this respect that without taking into account the claim for a retention allowance, the combined effect of the Association's claims, on top of the increases available under the MOU (further 4 per cent on 1 January 2003 and a further 5 per cent on 1 July 2003), would produce a wage increase for an 8th year registered nurse of 42.5 per cent up to 1 July 2003. The figure of 42.5 per cent is representative of the general increase for the whole award.
18 To find that the MOU does not preclude further general wage increases because the intent of the parties in that respect is not explicit on the face of the document would be entirely against the public interest and would be inconsistent with the Commission's obligations under s 146(2) of the Act to have regard to the likely effects of its decisions on the economy of New South Wales and on the public interest itself.
19 At the time it negotiated the terms of the MOU the Association took no steps to reserve its position regarding the claims it now pursues. We consider it did not do so because it clearly understood the nature of the agreement it was making. That is, one providing for a general increase for the life of the agreement to the exclusion of further general increases before 30 June 2004. If that was not the case and the Association had formed the intention at the time of the MOU negotiations to pursue further general wage increases during the life of the agreement but decided not to announce its intention for fear of jeopardising the MOU increases, it would be clearly contrary to the public interest for the Commission to now countenance such claims.
20 We observe that in a general circular to all members in January 2000 advising them of the MOU negotiations, the Association indicated that the "outcome" of the negotiations over the MOU did not preclude the Association from pursuing claims for "conditions". These were the claims later taken up in the Conditions Case referred to earlier in this decision. It is a reasonable inference to draw from this that in the MOU negotiations it was agreed the Association would be at liberty to pursue its conditions claims.
21 The other inference to be drawn from the absence of any reference to it in the general circular is that the Association had not reserved its position regarding additional general wage increases because it understood such claims were precluded. This is, as the respondent submitted, even more so having regard to the fact the applicant now contends that an agreement it entered into in 1996 created an anomaly, leaving nurses' rates lagging behind those of other health professionals. We consider such an anomaly would have been apparent in 1999 at the time the MOU was negotiated and an obvious issue in respect of which the Association would have reserved its position if it had believed it was open to it to do so.
22 In our opinion, at the time of the negotiation of the MOU the Association accepted the wage increases on offer on the basis that these increases would be the only general wage increases available for the life of the MOU. The Association is bound to respect that agreement unless it can be shown that to do so would be unreasonable or there are extraordinary circumstances that warrant a departure from the agreement. 23 We have previously emphasised the importance of industrial parties adhering to agreements they have made and it bears repeating what was said in our earlier Statement at pars [10] and [11]: 10 The first of the principal issues to raise for the parties' consideration is the MOU. Unless there are special or exceptional circumstances, the MOU may represent an insurmountable obstacle to any additional wage increases being granted by the Commission prior to the expiry date of that MOU. In this regard we refer to what the Full Bench said recently in Re Broken Hill Commerce and Industry Consent Award [2002] NSWIRComm 252 where, after referring to the respondent employer having acted inconsistently with an agreement to which it was a party, the Full Bench observed at par [8]: Parties should, as a matter of principle, consider their situation very carefully and deliberately before conducting themselves in such a manner. It is extremely important in industrial and employment relations that parties adhere to considered agreements entered into by them.
11 The adherence by industrial parties to their agreements has been a cornerstone of the system of industrial relations since the advent in this country of the statutory system of conciliation and arbitration over a century ago. The importance of this fundamental obligation should not now require any emphasis or reference to its practical and legal significance as was deemed necessary in the Broken Hill case. However, we consider that the observation by the Full Bench in Broken Hill is entirely apposite to these proceedings. Consequently, in light of an agreement that provides for significant wage increases and which is based on the premise that there would be "no new salaries or conditions claims arising from negotiation of productivity and efficiency improvements covered by this agreement", any claim to increase wages based on changes in work value might not, of itself, provide sufficient reason for the Commission to grant additional increases on work value grounds during the currency of the MOU.
24 There has been a great deal of evidence tendered in the proceedings regarding the work of nurses and how it is said the value of that work has increased. The HAC contended that there has been no increase in the value of work of nurses having regard to the relevant wage fixing principle.
25 We are yet to hear the submissions of the parties in relation to all of the evidence regarding changes in work value and so we are not in a position to make any final determination in that respect. We do consider, however, that sufficient material has been put to the Commission to allow us to form the view that since 1996 the work value of nurses in public hospitals has increased.
26 Notwithstanding this limited conclusion, we should indicate we have significant doubts as to whether there is scope for general wage increases to be awarded on work value grounds alone for the life of the MOU. The understanding and intent of the parties in making the MOU was to preclude such increases and, subject to what we say later in this decision regarding the unique mix of circumstances we have been presented with in these proceedings which, in our opinion, justify wage increases being granted to nurses in public hospitals, there do not appear to be extraordinary circumstances existing such that would cause us to award wage increases on work value grounds alone in addition to the 16 per cent available under the MOU.
27 We also consider that the claims for a retention allowance and qualification allowances are in the nature of general wage increases and may well be precluded by the MOU during its term.
28 The Commission will proceed to hear the parties' outstanding submissions in respect of the work value aspects of the claim, the retention and qualification allowances and other outstanding issues, on the dates that have been set aside for that purpose in 2003. However, if there are to be any further adjustments to wages arising out of the work value claim and the claim for allowances, any relevant award variation should not operate before 30 June 2004. One possible exception that might allow an earlier operative date relates to the success or otherwise of initiatives to overcome the problem of attracting and retaining nurses in order to maintain a viable public hospital system. We address this question later in the decision.
29 HAC and the intervenor submitted that the MOU was also a barrier to any wage increases being granted in relation to the Association's special case claim that a 1996 agreement entered into by the Association created an anomaly to the extent that it caused nurses' rates of pay to fall behind other health professionals.
30 In the Commission's Statement it was said in relation to this issue: As to the question of pay comparability, prima facie , it would appear that nurses' rates have not maintained an earlier relationship they had with rates for comparable professionals. One of the reasons why this may have occurred is because of an agreement struck by the Association in 1996 whereby it agreed to forego part of the across the board productivity based increases that were taken up by other public sector employees in return for significant work value increases for Nurse Unit Managers. 16 The circumstances of the 1996 agreement and its outcomes will need to be examined but an important question, nevertheless, is whether it is in the public interest for nurses' rates of pay to be at levels relatively lower than their professional counterparts, especially given the current nursing shortage. It seems common ground between the parties that this situation is likely to send a "negative message" to any person contemplating a career in nursing, that is, the value of the work of nurses in terms of rates of pay, even having proper regard to the requirements of the different undergraduate degree courses, is considered to be relatively less than other health professionals.
31 In 1996 the Association and other public sector unions entered into different agreements with the HAC. The agreements were to apply for the period 1 July 1996 to 31 December 1999. The arrangement on offer by the Department of Health at the time comprised a component fully funded by Treasury and a component to be funded by "productivity savings". The Treasury funded component involved increases totalling 12 per cent over the life of the agreement. The Association was advised that it was required to agree to an "unfunded" amount of between 2 and 6 per cent. Further, that if the Association did not agree to at least 2 per cent being funded through "productivity savings" the final Treasury funded increase could be implemented only from 1 July 1999 rather than from 1 January 1999.
32 In her evidence in the proceedings Ms Moait, the general secretary of the Association at the time, said of the 1996 negotiations: During the course of those negotiations it became clear that the only way in which productivity savings of 6% could be found was by the deletion of nursing positions. The NSWNA made a conscious decision to not agree to an option that would have resulted in the deletion of hundreds of nursing positions, and consequently elected to agree to an "unfunded" component of the minimum 2%. This ensured that nurses would receive increases totalling 14% during the three and a half year term of the agreement, ie, 12% fully funded by Treasury and 2% "unfunded" other than by so-called "productivity savings". The actual increases agreed between the NSWNA and the Department for the term of the 1996-1999 agreement were as follows: 1.11.96 - 3% across the board for all classifications
1.3.97 - "restructuring" increases for some classifications equivalent in cost to the Department to an increase of 3% across the board for all classifications
1.7.97 - 2% across the board for all classifications
1.7.98 - 3% across the board for all classifications
1.1.99 - 3% across the board for all classifications 33 In its negotiations with the Department of Health, the HREA elected to make an agreement for wage increases totalling 18 per cent for the three and a half year term. These increases were comprised of 12 per cent fully funded and 6 per cent funded through "productivity savings". The PSA obtained increases of 19 per cent.
34 The specific nature of the anomaly alleged by the Association derives from a comparison of rates of pay for physiotherapists and registered nurses. In 1990 it was agreed between the parties to fix the top rate on the registered nurses' pay scale as the equivalent of the top rate for physiotherapists (that is, $663.70 per week). The differential that now exists between these two pay rates is 8.22 per cent ($896.60 compared to $970.30). That differential came about largely because of the different agreements made by the Association (covering nurses) and the PSA (covering physiotherapists) in 1996. It is to be noted that the PSA no longer covers physiotherapists and since 1998 coverage has gone to HREA.
36 The Association, in addition to relying on its general submissions as to why the MOU was not a barrier to the Commission dealing with the anomaly issue, contended that the respondent had failed to show that the productivity savings that the other unions were required to make in order to achieve the productivity based wage increases in 1996-99 had in fact been delivered. In the alternative, it was submitted, if the savings had been achieved, it was inevitable that nurses would have contributed to those savings (for example, changes to the use of theatres, pathology and imaging services, increasing the rate of day of admission surgery). Consequently, it was submitted, if the savings to underpin the wage increases had not been delivered by the other unions and/or if nurses had contributed to any productivity savings beyond the 2 per cent required of them, it would be unfair against nurses to allow a situation to prevail whereby other health employees received wage increases without having to deliver productivity savings and, therefore, were not held to their 1996-99 agreement, but nurses were to be held to their agreement. 37 It is true that the contribution required by the HREA to productivity savings in order to fund a 6 per cent wage increase was never measured in any precise fashion but neither was the contribution required of the Association to fund a 2 per cent wage increase. That is not to say there were no productivity savings. The evidence suggests that savings were indeed made by contributions from both members of HREA and the Nurses' Association, but according to Mr Barker, Chief Financial Officer, Department of Health, the initiatives contributing to productivity savings mainly involved non-nursing staff.
38 Whilst it would appear to be impossible to apportion precisely the respective contributions to productivity savings arising out of the 1996-99 agreement, we can see no basis upon which to conclude that the HREA made no contribution to productivity savings or that its contribution was the same as or less than that of the Association.
39 As to the proposition that productivity improvements would have impacted on both nursing and non-nursing staff, it may be readily inferred that at the time the Association entered into the 1996-99 agreement it understood there were areas in respect of which productivity savings were being sought that would impact on both its own members and members of HREA. This is apparent from the terms of the agreement itself. In other words, the Association entered into the agreement aware that its members would be impacted by changes affecting HREA members but, nevertheless, proceeded to make the agreement in any event. It may be presumed that the Association did so in the belief that the changes would impact more heavily on HREA members than its own members and, as we have already observed, there is no basis to consider otherwise.
40 We do not consider it is open to the Association to contend that because HREA-related change impacted on nurses it is appropriate for the Commission to now make adjustments to nurses' wages to reflect that impact. Even if the impact could be quantified, which it cannot, the Commission is not prepared to unravel agreements made in good faith.
41 We have concluded that the anomaly claim, which involves a 'catch up' to physiotherapists, should not be regarded any differently to the work value claim given the existence of the MOU and our view about the importance of adhering to the agreement embodied in the MOU.
42 Having taken that decision to agree to the MOU, knowing full well the consequences, the Association cannot now expect the Commission to restore parity with physiotherapists, at least until after the expiration of the MOU and even then only if proper grounds exist.
43 This is not to say, however, that the Commission is unconcerned with the fact that nurses' wages have fallen behind not only those of physiotherapists but all comparable health professionals. Whilst it is the case the Association did make an agreement in 1996 which had the effect of lowering the relative position of nurses' wages, and did so with its "eyes open", that does not mean the Commission is prevented from assessing the effect of this situation on the issues we are required to consider in these proceedings.
44 In this regard, there is no doubt on the evidence in these proceedings that nurses under this Award work under stressful and difficult circumstances at the present time. The fact that their pay rates lag behind those of their professional colleagues is adding to the difficulties being experienced and, we consider, is exacerbating the shortage of nurses in public hospitals. 45 We consider the strain on nurses working under the Award, manifested by the shortage of nurses in public hospitals and the increasing stress under which they are working, combined with their depressed pay levels and the limited conclusion we have reached as to the increase in work value, has produced a unique mix of circumstances that falls outside what was contemplated by the parties at the time of the making of the MOU and to that extent we find a special case exists. Accordingly, the MOU is not an absolute bar against any consideration of wage increases for nurses during the term of the MOU.
46 The HAC referred to the fact that the Association was aware of a nursing shortage at the time of entering into the MOU. It seems to us, however, that on the evidence the problem has worsened since 1999 to the point of becoming critical. Further, the wage increases agreed upon in 1999, the staged implementation of those increases, and other measures taken in an attempt to alleviate the shortage have not had any significant measure of success.
47 The evidence is clear: there is a shortage of nurses in New South Wales. The figures show that the number of registered nurses' positions being actively recruited (PARs) almost doubled between 1996/97 and 2001/02. In May 2002 there were nearly 2000 nursing positions being actively recruited. Even taking into account the increase in the number of nurses required, there is, as accepted by Mr Trevor Craft, Assistant Director, Employee Relations, Employee Relations Directorate, New South Wales Department of Health, a "serious problem" in attracting and retaining sufficient permanent nurses. 48 As we observed in our Statement, the nursing shortage is not uniformly severe in all clinical and geographical areas. But we accept that it is widespread and in many areas severe. The evidence also suggests the shortage is more severe than previous shortages over the past five years.
49 Professor Rita Creegan, Visiting Professor of Nursing at the University of Technology, Sydney, (and until 2001 the Area Director of Nursing for South Eastern Sydney Area Health Service (SESAHS)) gave the following evidence with respect to the shortage at: Q. Would you accept that whatever shortages that might be being experienced of persons willing to work on a permanent basis, they would be variable depending upon, firstly, the nature of the speciality one is talking about? A. There is difficulty across the whole raft of specialities. Q. Particularly, specialities like emergency, ICU, operating suites? A. Mental health, midwifery, aged care, so there is not too many left.
50 Ms Susan Bunt, Nursing and Patient Services Manager in charge of the Division of Surgery and Clinical Care, St George Hospital, Kogarah, gave the following evidence with respect to St George Hospital: Q. As we speak today there are problems you have identified in the intensive care unit? A. Yes. Q. Do you have problems in relation to other areas as well? Now? A. Yes. Across the board. Q. In your case the problems tend to be worse in one area than another? A. There are areas that are more attractive than others. For example the emergency department in the four years I was in charge of that I experienced no nursing shortages. Now they are struggling to get staff but they still run on a full complement; whereas in the medical ward and some of the aged care wards they run on eight, nine or ten vacancies in that area. 51 A number of witnesses gave evidence about the need to close beds because of the shortage of nurses. Professor John Dwyer, Professor of Medicine, University of New South Wales, and Clinical Director of the Programs for Medicine and Oncology, Prince of Wales Hospital, gave evidence as to the substantial number of beds (at least 30 - 40) at the Prince of Wales Hospital that would have been opened immediately if nurses were available. He also referred to the occasions when the Prince of Wales and other hospitals have been placed on "LTO", that is, admitting patients only where there was a life threatening situation.
52 Ms Bunt gave the following evidence with respect to St George Hospital: Up until two years ago we could staff a winter ward requiring something like 18 FTEs [full time equivalents] to come to work on a casual or temporary basis. We have been unable to do that the last two years. 53 Ms Bunt also commented on the inability to obtain sufficient casual or agency staff:
Q: We are talking about 40 [vacancies] out of 1300 - 12 or 1300? A: Yes. That does not take into account the shift by shift vacancies, for example last Thursday we had 37 vacant shifts in a 24 hour period that we could not fill with either agency, casual because of sick leave, FACS leave and other issues. 54 Ms Linda Campbell, Nursing Unit Manager of the Neuromedical/Stroke Unit, Liverpool Hospital, gave evidence as to the situation at Liverpool Hospital: Q. Are you able to say anything about the vacancy rate more generally at Liverpool hospital? A. Every morning we have a 9.30 meeting with representatives from the nursing management and patient care coordinate (sic - coordinator) from both the directors and medicine and the directors of surgery attend that meeting; we discuss patient flow issues. Following that meeting we then discuss staffing issues and at nearly every meeting there are staff deficits not been filled and in particular the two problem areas, neuro medicine unit and the aged care unit. Q. Does the level of vacancies have any impact that you are aware of in terms of the number of beds that are able to be opened? A. In winter where there is a winter bed strategy and at Liverpool we opened 42 beds. Because of not enough nursing numbers the only number of beds open now are 29 and we are not able to open additional beds. Q. When would you normally open them? A. Around May and they stay open till September.
55 Ms Debra Thoms, Director of Nursing and Community Development, South Eastern Sydney Area Health Service, confirmed that during the last six months SESAHS has been unable to open a number of beds because of the nursing shortage. Ms Thoms also confirmed that the availability of casual or agency staff was not sufficient to enable winter beds to be opened.
56 Dr Claire Blizard, Director, Acute Medical Services, Western Sydney Area Health Service, Westmead Hospital, also gave evidence about the effect of shortages on bed numbers: Q. If you cannot secure sufficient numbers of nursing staff, you just cannot open the beds? A. Correct. Q. And at the moment there are a goodly number of public hospitals in that state where try as you might, you simply cannot find the nursing staff for the number of beds? A. Correct. 57 Dr Peter Kennedy, Director of Health Services, Central Sydney Area Health Service, gave the following evidence with respect to the Central Sydney Area Health Service (CSAHS): Q. There is currently a severe shortage of nurses within the Central Sydney Area Health Service? A. In terms of vacancies? Q. Yes. A. Yes, we do have a shortage of nurses. We have vacancies and we are filling those vacancies with agency nurses and pooled nurses. Q. In fact, Central Sydney has the second highest vacancies right through the whole of New South Wales? A. I think probably after South Eastern that would be right. Q. You say you make up the shortfall with casual and agency staff? A. Yes. A significant portion of the actual vacant positions are actually filled by agency and staff who work on a pooling or casual basis within Central Sydney. Q. From time to time it is not possible to make up the shortfall? A. It is not always possible. Q. Has the result been that last winter a number of winter beds that otherwise would have been opened have been unable to be opened? A. We did not open, I think, four beds out at Canterbury Hospital… Q. It would be true, but for the nursing shortage, extra beds would have been opened this winter? A. We would have opened at least a few extra beds at Canterbury, yes. 58 There was also evidence of nursing shortages in particular areas. The shortage is severe in the tertiary referral hospitals such as Prince of Wales, Westmead, St George, and Royal Prince Alfred. With respect to "metropolitan" hospitals such as Canterbury, Blacktown, Campbelltown and Blue Mountains, a recent report by the Greater Metropolitan Transition Taskforce (GMTT) on service enhancement has recently been published. With respect to the nursing workforce the taskforce observed that: Metropolitan Hospitals are facing the same challenges as is evidenced across the whole health system, that is, a critical shortage of nurses, especially in particular speciality areas.
59 Professor Dwyer, who was a member of the Taskforce, gave the following evidence as to which speciality areas in metropolitan hospitals were most severely affected by the shortage:
There is a range of them…I suppose geriatrics is one area where there is a very large need, mental health, general medicine, certainly already certain areas which are predictably, given the nature of the work, appear to be less attractive… …… Geriatrics and general medicine were two classic examples, but there is a shortage of speciality nurses midwives for example. We found great difficulties in many areas recruiting enough midwives. There is range. It is not only evenly distributed."
Q. Intensive care units would be one? A. Yes, there is a high burnout there, yes. 60 The Report of the Rural Health Implementation Coordination Group commented in September 2002 on the shortage in rural areas as follows: While the Rural Referral Hospitals appear generally able to attract sufficient nurses to meet their general needs there are shortages in core areas such as midwifery, critical care, operating suite and mental health as well as primary care and community health. ….. [T]here are currently significant vacancies within the rural areas for generalist registered nurses, midwives and community nurses.
61 Ms Lynette Day, Nursing Unit Manager, Paediatric Unit, Griffith Base Hospital, Griffith, gave evidence of the nursing shortage as it affected Griffith Base Hospital as follows: Griffith Base Hospital has a recruitment problem with registered nurses. Recently it has been as much as twenty eight positions on a roster down in one day. I know that we are losing our experienced staff. Everyone is tired….Newer Graduates tend to leave nursing or to leave Griffith Base Hospital to find work at a larger hospital where there are more staff on duty at any one time so that there is not so much responsibility and pressure for the new graduates.
62 Ms Lynette Nancarrow, Director of Nursing and Manager of Clinical Operations, Griffith Base Hospital, a witness for the respondent, said that there is pressure on beds in NSW because "there's not enough nursing staff to man the beds.." Ms Nancarrow gave further evidence as to the position at Griffith Base Hospital as follows:
there has been a greater….decrease in our ability to replace staff. For example, we normally have seven graduate nurses per year and certainly in the last two years we have only been able to recruit two or get two for those positions. There are also less nursing staff to be had, given our location is remote and its more difficult for us to be competing against the bigger hospitals or hospitals closer to facilities.
63 Ms Nancarrow further gave evidence that the increased number of vacancies at the Griffith Base Hospital constituted "a serious shortage" which made things "very difficult".
64 In relation to intensive care nurses the following evidence was given:
· Ms Bunt gave evidence that in the Intensive Care Unit (ICU) area at St George Hospital, there was no significant shortage in 1998. The shortage at St George ICU had developed since that time. She further gave evidence that St George followed some 18 months behind the other tertiary referral hospitals in the area and that St George would follow hospitals such as the Prince of Wales. · Ms Needham gave evidence that the ICU at Westmead Hospital was in a relatively good position in terms of vacancies compared to other ICUs. However, she gave the following evidence: Q: Do you have difficulty in filling those (ICU) positions? A. Westmead has traditionally had difficulty filling their rosters because over the years there has been a shortage of intensive care units and that is something that is echoed across all intensive care units. · Dr Diana Horvath, Chief Executive Officer, Central Sydney Area Health Service, identified the ICUs as an area of high turnover and high recruitment difficulty at Concord and Royal Prince Alfred Hospital. · Professor Dwyer identified ICUs as one of the areas in which metropolitan hospitals were experiencing difficulties. 65 With respect to midwifery Dr Caroline Homer, Clinical Midwifery Consultant Grade 3, Division of Women and Children's Health, St George Hospital, Kogarah, gave the following evidence: Q. Are you able to tell the Commission how many vacancies there currently are for midwives in the New South Wales public hospital system? A. It varies from month to month, but it has usually in recent times been around 100 vacancies.
Q. When you say "in recent times" what period are you referring to? A. In the last two years it has been more chronic. There are more vacancies over time, particularly in the last two years across NSW for midwives and this used to be predominantly in the rural areas, metropolitan hospitals found it reasonably easy to recruit midwives, certainly in the last 12 to 24 months. This is now seen in metropolitan hospitals as well that the shortage is becoming chronic.
66 Ms Sandra Hoot, the Divisional Director, Liverpool and Fairfield Sector Mental Health Services, gave evidence of the significant shortage of mental health nurses. Ms Hoot gave evidence of having to fill nurse positions with other categories of staff as a result of the shortage. Ms Hoot also gave the following evidence: Q. Would it be correct to say that overtime would be a greater feature of life of a mental health nurse than the nursing community generally? A. I think increasingly nurses are being asked to work overtime because of shortages and when you are not able to get agency staff. It may be more acute in mental health, I'm not sure.
67 Mr Helmut Obman, Clinical Nurse Specialist in Mental Health, Maroubra Centre, Maroubra, gave evidence of the fact that some vacancies for mental health nurses in community mental health teams were unable to be filled in over six months.
68 Ms Christine Coombs, Director of Nursing, Tamworth Base Hospital, identified a problem recruiting mental health nurses at Tamworth.
69 The shortage of community nurses has worsened over recent times: Ms Pamela Brady, Acting Director of Community Nursing, Western Sydney Area Health Service (WSAHS) stated that WSAHS currently has about 20 community nurse vacancies and that "Recruitment of community nurses has become very much more difficult in the WSAHS over the last eight months".
70 Ms Campbell gave evidence that the Neuromedical/Stroke Unit at Liverpool Hospital was functioning with around 30-50 per cent of all rostered shifts filled with casuals or agency staff because of the inability to fill positions. At the time of Ms Campbell's evidence on 24 July 2002 the unit had 11.6 vacancies out of 23.7. Some of the time those vacancies are simply unable to be filled at all.
71 Mr Brian Grant, Clinical Nurse Specialist, Cardiology Unit, Liverpool Hospital, Liverpool, gave evidence concerning vacancies in the cardiology unit at St George. A number of registered nurse vacancies have been persistently unable to be filled. The response of the Hospital was to appoint enrolled nurses and even assistants in nursing to registered nurse positions as an immediate stopgap. However, the registered nurse vacancy rate has continued to climb with others (at the time of Mr Grant's evidence) thinking of resigning.
72 The respondent acknowledged that there was a shortage of nurses prepared to work on a permanent basis. However, it was contended the Commission could not be satisfied that there is evidence of a shortage of nurses prepared to work as agency nurses and casual nurses.
73 It was submitted for the respondent that: The Commission could not be satisfied on the evidence before it at this stage that the general picture is one in which there is an overall shortage of nurses such that vacant positions are not generally able to be filled on a shift by shift basis.
74 In relation to agency nurses, the HAC said: There was limited evidence that in some areas of speciality (sic) there might be a difficulty obtaining a nurse with the appropriate speciality (sic) qualifications from agencies from time to time ... but there was no general evidence demonstrating a shortage of agency nurses. Rather, the general evidence demonstrated that Area Health Services are increasingly using agency nurses, suggesting at the very least that there is an increasing supply of agency nurses. ... Given there is no demonstrated shortage of agency nurses, the Commission would not increase rates of pay for agency nurses, regardless of what other steps the Commission determined to take in these proceedings.
The intervenor supported the HAC in opposing any increases for agency nurses.
75 It may be seen that it was common ground that there exists a shortage of permanent nurses, although it was not agreed that the shortage was uniform or widespread. Further, the HAC contended that there was no evidence of a shortage of agency nurses and these were available in sufficient numbers such that vacant positions are generally able to be filled on a shift by shift basis.
76 What appears to be happening in the nursing workforce is that many nurses are moving out of the permanent workforce and are taking up agency or casual nursing or leaving the profession altogether. The reasons why this is occurring are evident from the surveys of nurses tendered in the proceedings and include a desire on the part of nurses to obtain greater control over their lives through more flexible arrangements inherent in agency or casual nursing such as the ability to be selective about the shifts they work. This allows more time to devote to family responsibilities and avoids the onerous demands of shiftwork that a nurse working on a permanent basis is inevitably required to deal with.
77 This trend has been evident for some time now. The respondent has referred to an impressive list of initiatives being pursued in an attempt to arrest the trend and to attract and retain permanent nursing staff. The initiatives are yet to bear substantial fruit but those involved must be encouraged to continue with their efforts. It is impossible to expect hospitals to run efficiently and effectively without an adequate number of properly trained, permanent nursing staff.
78 Certainly, in the long term, the answer to retaining and attracting permanent nursing staff does not lie wholly, or even substantially, in increasing the wages for nurses. As we observed in our Statement: Wage increases are unlikely to be a panacea in addressing the nursing shortage and a proper balance will need to be struck between the level of wage increase awarded, if any, and other initiatives that may be appropriate or necessary. There is unlikely to be long-term benefit in granting wage increases as a contribution to resolving the nursing shortage unless other initiatives, which are arguably just as, or more, important, are set in train. Many of these initiatives have been identified in the 85 recommendations arising out of a Senate Community Affairs References Committee Inquiry into Nursing entitled "The Patient Profession: Time for Action", tabled on 26 June 2002. 79 We have closely considered this question of whether any increases at this time should be restricted to nurses working on a permanent basis. For present purposes we consider the evidence and the weight of the evidence is in favour of the contention that the nursing shortage is affecting all nurses and not just those in permanent employment. If there were no shortage of agency nurses we would have expected that the bed closure problems referred to in the evidence of a number of witnesses would have been easily resolved by hiring agency nurses. But that was not the case.
80 Further, we are not satisfied we have sufficient information to make a judgment about the implications of not increasing the wages of agency nurses along with those of nurses in the permanent workforce. The reality is Area Health Services are increasingly (although understandably in the light of the likely legal situation) treating their agency nurses as their own employees and agency nurses work side by side with their permanent counterparts. Agency nurses are also covered by the same Award as permanent nurses when they are working in a public hospital.
81 Whether there has been any increase in the work value of agency nurses, or whether their work value has increased to the same extent as nurses working on a permanent basis, is a matter the parties are required to address in their submissions relating to the remaining issues in these proceedings. It may be, for example, the level of responsibility and the conditions under which permanent nurses work means that their work should attract a higher level of pay than agency nurses.
82 The respondent submitted the Commission was not in a position to grant a uniform wage increase because the nursing shortage was not uniform. Further, that the Commission could not target the increases to where the shortages existed because there was not sufficient evidence to enable this to be done. The intervenor, on the other hand, submitted, "It is essential that any increase that is aimed at addressing shortages be very carefully targeted at the areas of shortage".
83 We consider that the respondent's contention that the nursing shortage is not uniformly spread throughout the health system is correct. Shortages vary from specialty to specialty and, indeed, hospital to hospital. Further, shortages appear to be more evident in metropolitan as opposed to a number of rural areas. As the GMTT report stated, "Not all hospitals have the same shortages."
84 But as the GMTT report also said: Metropolitan Hospitals are facing the same challenges as is evidenced across the whole health system, that of a critical shortage of nurses , especially in particular specialty areas (our emphasis). 85 Professor Dwyer said in his evidence, "... the majority of hospitals ... have a critical shortage of nurses." Professor Dwyer described it as "a major, major problem."
86 Nursing shortages were also addressed in the final report of the National Review of Nursing Education: "Our duty of care" published in August 2002. Sourcing material from the Commonwealth Department of Employment & Workplace Relations the report noted that in New South Wales in March 2001 and February 2002, shortages existed in 19 of the 21 categories of nursing specialisations and in respect of the remaining two categories there were "recruitment difficulties".
87 Whilst the nursing shortage may not be uniformly spread throughout the health system and some hospitals may not be experiencing any difficulty in this respect, that is not sufficient reason for the Commission to withhold across the board wage increases in order to address what is patently a widespread and serious problem. Whilst we note Professor Dwyer's opinion that he favoured some targeting of any wage increase he also favoured an across the board increase for nurses. We also note Mr Craft's opinion that there are considerable practical difficulties to be overcome in attempting to target wage increases to specific categories of nurses either on a geographical or clinical basis. Whether targeting can be or should be achieved through qualification allowances is a matter that is reserved for the future proceedings that have been scheduled.
Whether nursing shortage is a basis for granting wage increases
88 The respondent submitted there were a number of other reasons why the Commission would not grant increases on the basis of there being a nursing shortage. It is necessary to deal with each of the respondent's objections. These may be summarised as follows:
· the Commission would not overturn the well established industrial principle that wage rates should not be set on the basis of shortages (even in the case of vital professions) - indeed to increase rates on the basis of a shortage would be contrary to the public interest; · the wage rate is not in itself a significant factor in nurses' decisions to work as nurses, and so any increase in rates is unlikely to have a significant beneficial effect on recruitment and retention, but will impose a significant burden on the respondent;
· the respondent is taking active steps to alleviate the nursing shortage, and any wage increase granted would significantly impinge on the ability of the respondent to take those and further steps (being steps that are targeted to the particular areas of need);
· to the extent that an increase in rates might have the potential to assist, nurses will receive a wage increase of 9% in the next 12 months pursuant to the MOU, which will make them overwhelmingly the highest paid nurses in Australia.
89 As to the first proposition, namely, wage rates should not be set on the basis of labour or skill shortages, we emphasise that we are not proposing to increase rates of pay for nurses simply on the basis that there is currently a shortage of nurses. The evidence was that the shortage is causing a strain on the public hospital system in New South Wales; that the shortage is a serious problem that needs to be addressed as a matter of priority both in respect of the short and long term; that nurses are coming under increasing stress because of the shortage, with an effect on the value of their work; and, critically, that nurses' wages are below the level of all other comparable health professionals and this is contributing to the nursing shortage.
90 We agree with the respondent that a claim for wage increases could not succeed if it was based solely on the contention that there is a shortage of a particular skill or class of labour, especially where the claimant is a party to a current agreement that provides for wage increases over the life of the agreement. We note, however, the decision by a Full Bench of the Australian Industrial Relations Commission in relation to matters under ss 170MX and 170MW of the Workplace Relations Act 1996 (Cth) concerning rates of pay in the aged care sector in Victoria covered by the Nurses (Victoria Health Service) Award 1992 (unreported, 28 January 2000, Print S2652), where the Full Bench took into account the shortage of registered nurses in granting wage increases.
91 When considering an application for wage increases on the basis that a special case exists and where it is claimed that there is a shortage of labour, the Commission is entitled to look at all of the circumstances in order to determine whether a special case is made out. The circumstances will include the important consideration of the public interest. In our opinion, the disadvantaged position of nurses and the difficulties being experienced in the public hospital system because of the nursing shortage are powerful public interest considerations.
92 The second contention of the respondent was that any increase in rates is unlikely to have a significant beneficial effect on recruitment and retention, but will impose a significant burden on the respondent. The intervenor also submitted that "it is not clear that the supply of nurses will be very responsive to pay increases, other things being equal." The intervenor submitted that is was not clear that the supply of registered nurses was very elastic relative to its price.
93 The intervenor referred to the University of Aberdeen's Health Economics Research Unit's (HERU) recent review of empirical research on nurses' labour supply to help guide health policy in the United Kingdom. As the intervenor noted, the HERU review of the empirical research carried out since 1970 found that the picture presented of determinants of nurse labour supply was "rather unclear". Accordingly, the intervenor submitted: Given the ambiguity of the evidence, and the lack of evidence directly pertaining to Australia or NSW, it would be very risky for the Commission to adjudicate a wage increase for nurses predicated on that increase helping the shortage problem.
94 The respondent referred to the NSW Nursing Workforce Research Project, a comprehensive survey published in September 2000 by the Department of Health of over 10,000 nurses not currently working as a nurse. The Department's Survey sought from those nurses the main reason why they were not currently working as a nurse. Family responsibilities was the most popular response, being that of 29 per cent of respondents. Having a job with better pay was the ninth most popular reason, with 3.15 per cent stating that was their main reason for not working as a nurse. A further 1.29 per cent stated that 'nursing salaries too low' was their main reason. That is, in total less than 5 per cent of nurses not working as a nurse nominated the pay level as the main reason for not working as a nurse.
95 Senior counsel for the HAC also referred to a report prepared for the Association by Dr John Buchanan and Ms Gillian Considine of the Australian Centre for Industrial Relations Research and Training (ACIRRT), University of Sydney in May 2002 entitled "Stop telling us to cope!" Senior counsel referred to ACIRRT's conclusion that pay was not the most important feature in addressing the nursing shortage and to other observations in the report to the same effect, namely, that:
· Pay is important to nurses, but it is not the primarily higher pay that is luring them to other sectors of the labour market. · Increased pay would help stem the drain but it alone would not stop it. · The key concern to nurses today is the changing nature of work and especially the change to their roles and the subjective experiences associated with work. · Pay is part of the problem, but not the only problem. . . But improvements in pay alone will not be enough. · Nurses, generally speaking have historically not been solely or even primarily attracted to 'the money' of nursing.
96 Senior counsel for the respondent submitted the Commission would conclude that both the Buchanan report and the Research Project are consistent in concluding that the issue of pay is not a significant factor in retaining and attracting nurses.
97 Mr Kenzie urged the Commission to exercise caution in interpreting the findings of a "Best Practice Survey" prepared as part of a Senate Community Affairs References Committee Inquiry into Nursing (29 June 2001, updated in May and August 2002) which identified, amongst other things, the main attraction and retention factors for nurses and the main triggers that caused nurses to leave their organisation or their profession. It was submitted that: ...the Best Practice survey is a survey of current nurses who, whatever their thoughts about the current system (including pay rates) have not left nursing. The Commission would get a better idea of what motivates nurses who do leave nursing from a comprehensive survey of nurses who have left nursing (namely the Department's survey, which did not show that pay was a significant factor for those who had decided to stop work as nurses). 98 Mr Kenzie also referred to exit interviews at Westmead ICU, Westmead Hospital and Prince of Wales Hospital, which he said confirmed that the reasons nurses gave for leaving did not usually include the pay level.
99 In referring to the Department's survey, counsel for the Association contended only about 3,253 of the 10,089 former nurses responding to the survey indicated they would consider returning to the workforce. He submitted that it is with this group that the debate should properly be concerned. Further, Mr Howells submitted: The critical question for present purposes is whether a pay increase would be effective as an incentive for the 3000+ nurses who would consider doing so to return to work. Of that group, 30.2% identified better pay as a factor that would act as an incentive. It is significant that this response emerged from an open ended question in the questionnaire (question 9). That 30.2% of the critical group nominated pay as an incentive without prompting underlines its significance. 100 Mr Howells further submitted the Department's survey: ... is only relevant to (part of) the recruitment aspect of the shortage; it has no relevance to the retention problem which Professor Dwyer identified (without contradiction) as the most serious aspect of the shortage. On the retention issue, by far the most reliable indicator is found in the Best Practice Survey. In this respect, we agree with counsel for the Association.
101 In relation to ACIRRT's report we consider it to be a fair and balanced one and this is reflected in its conclusions on pay that: Pay is part of the problem, but not the only problem. Improvements on the pay front appear to be necessary if there is to be any real prospect for an improvement in drawing ex-nurses (and potentially more new nurses) into public hospitals. But improvements in pay alone will not be enough.
102 The Best Practice Survey interim report of 29 June 2001 was based upon surveys of about 5,300 nurses across Australia. It concluded that: 46% of nurses are at HIGH RISK of leaving the nursing profession.
103 Of those nurses identified as being at high risk of leaving the profession, the top issue that respondents identified that would affect their decision to leave nursing was: Low pay compared with their responsibilities and/or compared with what they would get in other professions (especially in teaching, accountancy, and, to a lesser extent, law).
104 Other reasons why nurses were at high risk of leaving the profession included:
· Perceived lack of appreciation or being valued for their contribution and commitment.
· Age related issues. 105 The updated Best Practice Survey produced in August 2002, showed that in relation to nurses across almost all clinical areas in the South Eastern Sydney Area Health Service (comprised of in excess of 1700 responses), about 50 per cent or more of nurses currently employed are at risk of leaving nursing altogether. The main trigger is listed as "Pay".
106 It is difficult to be absolutely certain about which of the competing surveys should be preferred given the different methodologies, focus, timing and the make-up of survey respondents. We determine, on balance, that as a general proposition pay is an important consideration for nurses both in terms of attracting people to the profession and in retaining them. But as the ACIRRT report suggests, pay is but one issue and an increase in wages, on its own, will not solve the problem of the nursing shortage.
107 Nonetheless, in circumstances of a nursing shortage where nurses' wages are at levels lower than they historically have been compared to all other comparable health professionals, we consider a wage increase at this time that redresses this situation in significant measure will have a positive effect on nurses' decisions about whether they stay in their chosen profession. If we were not to address this issue there is no doubt that it would be, and would be seen by nurses to be, a negative signal and lack of appreciation which could have the effect of exacerbating the nursing shortage and the mounting problems facing the public health system.
108 The respondent's next contention was that it is taking active steps to alleviate the nursing shortage, and any wage increase granted would significantly impinge on the ability of the respondent to take those and further steps. These steps may be summarised as follows:
109 Mr Kenzie submitted that: Were the Commission to grant the Applicant's claim for a general wage increase because of the nursing shortage, that would significantly impact on the Respondent's ability to fund initiatives of the type set out above. Given the fact that pay in itself is not a significant factor in recruitment and retention of nurses ... and the nursing shortage is not uniform, the Commission could not be satisfied that an across the board increase would be a better way to target expenditure to recruit and retain nurses than expenditure on the initiatives described above.
110 It must be acknowledged that there are, indeed, a significant number of initiatives being pursued in an effort to address the problems of attracting and retaining nursing staff in public hospitals. As we said earlier, those initiatives should be encouraged. But the pursuit of such initiatives does not exclude the prospect of any wage increase provided that the wage increase is not set at such a level as to undermine those initiatives. As we observed in our Statement, " a proper balance will need to be struck between the level of wage increase awarded, if any, and other initiatives that may be appropriate or necessary."
111 As to Mr Kenzie's contentions that pay in itself is not a significant factor in recruitment and retention of nurses and the nursing shortage is not uniform, it will be apparent from what we have said that although we accept the second contention, we do not accept the first.
112 The respondent's fourth contention was that to the extent that an increase in rates might have the potential to assist, nurses will receive a wage increase of 9 per cent in the next 12 months pursuant to the MOU, which will make them overwhelmingly the highest paid nurses in Australia. Mr Kenzie submitted: The Commission would be mindful that it would not be in the public interest to create a such a pay differential between NSW and other States that nurses in those States might come to NSW simply for the extra pay, creating or enhancing the shortages in those States and/or placing pressure on those States to increase pay to 'catch-up'.
113 On current rates of pay and taking into account the 9 per cent in the pipeline, nurses in New South Wales will be the highest paid compared to other States, although this does not take into account the various allowances payable to Victorian nurses including the Certificate qualification, Diploma qualification and Master's qualification allowances.
114 The Commission's chief concern, of course, is what might be appropriate for nurses in New South Wales and it would be inappropriate to make decisions in that respect based on the potential effect of any such decision on nurses in other States. There may be any number of reasons why there is a differential in nurses' wages across the States and it has not been shown in these proceedings that there is any form of nexus between interstate rates for nurses that needs to be preserved.
115 Nevertheless, it is necessary that we take into account the fact that nurses are due to receive a further 9 per cent increase (comprised of a 4 per cent increase from 1 January 2003 and a further 5 per cent increase from 1 July 2003) in their wages over the next six to seven months and it is appropriate to have regard to the fact that wages for nurses in New South Wales are not lagging behind those of other States. These considerations must have a moderating effect on any decision to grant additional wage increases.
116 Evidence was given by Mr Mark Ronsisvalle, Acting Secretary of the New South Wales Treasury, as to the economic impact of the claim. Mr Ronsisvalle said that the total cost of the Association's claim was estimated to be $593.5 million in the first year and $473.9 million annually thereafter. Mr Ronsisvalle said: Therefore, it is likely that the NSW Nurses Association's claim, if granted, and then funded from the budget, will push the budget into a substantial deficit. The deficit could be at least $400 million in both 2002-03 and 2003-04, other things being equal.
117 Mr Ronsisvalle referred in his evidence to the prospect of a flow on to rates of pay for nurses in the Private Hospital Industry (State) Award and the effect of that on charges for private health services. He said "Increased private health insurance premiums would be likely to push people back from the private to the public health system. This will be a further source of cost pressure on public hospitals."
118 Given the basis upon which we propose to increase rates of pay for public hospital nurses we do not envisage any automatic flow on to private hospital nurses. Any increase to private hospital nurses would only occur if a proper case was made out under the wage fixing principles in respect of proceedings involving the relevant award or awards.
119 Mr Ronsisvalle expressed concern about the flow on consequences to public sector employees. Given the basis upon which we propose to increase the rates of pay for nurses under this Award, the prospect of a general flow on to other health sector employees is so slight as to be negligible. As to public sector employees generally, there is no evidence before us of any nexus between such employees and nurses that would show that a flow on was justified or, indeed, even likely. In this respect, a significant feature of the case that leads us to grant wage increases for public hospital nurses is that the rates for graduate nurses have fallen significantly behind their relative historical position with other graduate occupations. This, in our opinion, has had adverse consequences for the availability of nurses for work and is placing a strain on the public hospital system. On the evidence before the Commission the nurses' graduate rate is the only such rate in the public sector that has fallen behind. That being the case, it follows that in respect of other professional and paraprofessional occupations in the public sector, unless it could be shown that they are in an identical position to nurses, the decision in this matter has no relevance.
120 The Commission is required to take into account the likely effects of its decisions on the New South Wales economy. As Mr Ronsisvalle stated in his evidence to the Commission, unbudgeted wage increases to approximately 35,000 full time nurses will obviously have a significant impact on the State's finances although we note that the Government, whilst opposed to the claim, has undertaken to fund any increases.
121 In arriving at the amount of increase to be awarded to nurses the Commission has taken into account the public interest and the likely effects of the increase on the economy.
122 We have decided to increase the weekly rates of pay for nurses under the Public Hospital Nurses' (State) Interim Award by six per cent. We do so on the basis that a special case has been made out by the Association for nurses' wages to be increased. As we observed earlier, the situation is that nurses' wages are below those of comparable health and other public sector professionals. Against the background of the need to attract and retain nursing staff in order to relief the strain on the public hospital system, it is in the public interest to lift nurses' wages.
123 In awarding a further six per cent increase we noted earlier that we have taken into account the increases that have been received under the MOU and those which will apply in the next six to seven months. Further, the amount we have awarded will largely, although not completely, address the deterioration in the graduate level of nurses' salaries under the Award.
124 Although the effect of our decision, in a formal sense, will be to vary the Interim Award, in substance a new interim award is being made in which case the principles discussed in the Conditions Case apply. That is, any interim wage increase must be approached on a cautious basis so as not to "embarrass the final result". Such an approach, in the context of a final determination in this matter, will permit the Commission to have regard to all of the relevant factors in setting fair and reasonable rates of pay, including other relevant graduate rates then existing. It also means that when we come to assess fully the question of change in work value it should be understood that the six per cent wage increase here awarded is, in part, in recognition of work value changes.
125 We have commented earlier that wage increases are not the whole answer to the nursing shortage but we consider that they can play an important part in a broader strategy that we are told is now being put into place to alleviate the shortage. We intend to monitor the effectiveness of this strategy, and its success or otherwise may be an important consideration in assessing the claims for qualification and retention allowances and in determining whether or not it is appropriate to apply any additional wage increase that might be awarded on work value grounds from a date earlier than 1 July 2004. If it can be demonstrated, for example, that the various initiatives implemented by the respondent to overcome the difficulties in attracting and retaining nurses in the public hospital system are working and that wage increases that have been awarded in this decision have had a limited impact, then it would be most unlikely that the Commission would be convinced to grant further increases prior to 1 July 2004. On the other hand, if the initiatives are having little or no effect and there is evidence that the wage increase has had a positive effect, there may be a case for any increase to be payable earlier than 1 July 2004.
126 We expect, when proceedings resume in 2003 or soon thereafter, to be provided with precise information as to what measures have continued to be taken (and any new measures that have been implemented) to address the problem of attraction and retention of nurses in the public hospital sector. We also expect to be informed at the appropriate time of the results of such measures, the basis for assessing with precision the effectiveness of such measures and the program put in place by the respondent up to 30 June 2004 to continue to monitor the success or otherwise of the initiatives to overcome the shortage issue.
127 The increase of six per cent shall apply from the same operative date as the next increase of four per cent payable under the MOU, namely, 1 January 2003. Due to the compounding effect, this will mean that from 1 January 2003 nurses' wages will initially increase by slightly more than 10 per cent. Under the terms of the MOU rates for nurses will increase by a further 5 per cent from 1 July 2003. The full effect of these increases will be to produce a total increase of over 15.75 per cent in the first six months of 2003. A schedule of rates of pay, including current rates and those to apply from 1 January 2003 and 1 July 2003, is set out in Annexure A to this decision. The rates of pay in Annexure B represent the actual award variation to apply from 1 January 2003. Annexure B incorporates the four per cent increase payable from 1 January 2003 and the six per cent increase awarded by this decision.
128 Because the Public Hospital Nurses' (State) Interim Award is due to expire on 12 June 2003, it will be necessary to consider whether a new interim award should be made in order to accommodate the five per cent increase payable under the MOU from 1 July 2003 or whether it is appropriate to make a new consolidated award. This may depend on the progress of the outstanding issues in these proceedings.
129 Those outstanding issues, as we understand them, are as follows:
Whether further wage increases are justifiable on the ground of changes in the work value of nurses, including enrolled nurses and assistants in nursing.
What is the datum point for the assessment of changes to work value for nurses, noting that the datum point for enrolled nurses may be different to that for registered nurses and assistants in nursing.
Whether the claim for qualification allowances is justifiable on work value and/or special case grounds.
Whether the claim for retention allowances is justifiable on special case grounds.
Whether increases to the rates of pay for assistants in nursing are justifiable under the Equal Remuneration Principle.
What is to be done with the outstanding issues from the proceedings in Matter No. IRC 3810 of 2000 (the Conditions Case).
130 We make the following orders and variations to the Public Hospital Nurses' (State) Interim Award:
Column Column 2* Column 3** Column 4*** 1 01/01/03 01/01/03 01/07/03 Classification 01/01/02 Per Week Per Week Per Week Per Week $ $ $ $ Assistant in Nursing - Under 18 years of age - 388.90 404.50 428.80 450.20 First year of experience 406.10 422.30 447.60 470.00 Second year of experience 422.30 439.20 465.60 488.90 Thereafter
18 years of age and over - 458.80 477.20 505.80 531.10 First year of experience 473.50 492.40 521.90 548.00 Second year of experience 488.30 507.80 538.30 565.20 Third year of experience 503.60 523.70 555.10 582.90 Thereafter Trainee enrolled nurse - Under 18 years of age - 388.90 404.50 428.80 450.20 First year of experience 406.10 422.30 447.60 470.00 Second year of experience 422.30 439.20 465.60 488.90 Thereafter
18 years and over - 458.80 477.20 505.80 531.10 First year of experience 473.50 492.40 521.90 548.00 Second year of experience 488.30 507.80 538.30 565.20 Third year of experience 503.60 523.70 555.10 582.90 Thereafter Enrolled Nurse 563.20 585.70 620.80 651.80 First year of experience 575.50 598.50 634.40 666.10 Second year of experience 587.90 611.40 648.10 680.50 Third year of experience 600.30 624.30 661.80 694.90 Fourth year of experience 612.90 637.40 675.60 709.40 Thereafter Enrolled Nurse - Special Grade 632.00 657.30 696.70 731.50 Residential Care Nurse - 549.40 571.40 605.70 636.00 First year of experience 560.50 582.90 617.90 648.80 Second year of experience 571.30 594.20 629.90 661.40 Third year of experience 584.50 607.90 644.40 676.60 Fourth year of experience 595.30 619.10 656.20 689.00 Thereafter Mothercraft Nurse - 605.40 629.60 667.40 700.80 First year of experience 624.70 649.70 688.70 723.10 Second year of experience 647.10 673.00 713.40 749.10 Third year of experience 669.00 695.80 737.50 774.40 Fourth year of experience 691.20 718.80 761.90 800.00 Fifth year of experience 713.90 742.50 787.10 826.50 Sixth year of experience 729.20 758.40 803.90 844.10 Seventh year of experience 745.40 775.20 821.70 862.80 Eighth year of experience 761.00 791.40 838.90 880.80 Ninth year of experience The mothercraft classification applies only to persons employed in this classification as at 31 December 1998. Persons employed after that date are classified as enrolled nurses. Nurses undergoing pre-registration training otherwise than as a student. 550.50 572.50 606.90 637.20 Registered Nurse - 638.50 664.00 703.80 739.00 First year of experience 673.30 700.20 742.20 779.30 Second year of experience 708.00 736.30 780.50 819.50 Third year of experience 745.20 775.00 821.50 862.60 Fourth year of experience 782.10 813.40 862.20 905.30 Fifth year of experience 819.10 851.90 903.00 948.20 Sixth year of experience 861.20 895.60 949.30 996.80 Seventh year of experience 896.60 932.50 988.50 1037.90 Eighth year of experience Clinical Nurse Specialist 933.30 970.60 1028.80 1080.20 Clinical Nurse Educator 933.30 970.60 1028.80 1080.20 Nurse Educator - 1035.20 1076.60 1141.20 1198.30 First year of experience 1064.30 1106.90 1173.30 1231.90 Second year of experience 1090.50 1134.10 1202.10 1262.20 Third year of experience 1147.40 1193.30 1264.90 1328.10 Fourth year of experience Clinical Nurse Consultant (appointed prior to 31/12/99) 1147.40 1193.30 1264.90 1328.10 Clinical Nurse Consultant Grade 1 1121.70 1166.60 1236.60 1298.40 First year of experience 1144.50 1190.30 1261.70 1324.80 Second year of experience Clinical Nurse Consultant Grade 2 1167.30 1214.00 1286.80 1351.10 First year of experience 1190.40 1238.00 1312.30 1377.90 Second year of experience Clinical Nurse Consultant Grade 3 1236.10 1285.50 1362.60 1430.70 First year of experience 1259.00 1309.40 1388.00 1457.40 Second year of experience Nurse Practitioner - 1236.10 1285.50 1362.60 1430.70 First year of experience 1259.00 1309.40 1388.00 1457.40 Second year of experience Nursing Unit Manager - 1124.70 1169.70 1239.90 1301.90 Level 1 1178.30 1225.40 1298.90 1363.80 Level 2 1209.80 1258.20 1333.70 1400.40 Level 3 Nurse Manager - Grade 1 1121.70 1166.60 1236.60 1298.50 First year 1144.50 1190.30 1261.70 1324.80 Second year
Grade 2 1167.30 1214.00 1286.80 1351.10 First year 1190.40 1238.00 1312.30 1377.90 Second year
Grade 3 1236.10 1285.50 1362.60 1430.70 First year 1259.00 1309.40 1388.00 1457.40 Second year
Grade 4 1304.80 1357.00 1438.40 1510.30 First year 1327.70 1380.80 1463.60 1536.80 Second year Nurse Managers - Grade 5 1373.30 1428.20 1513.90 1589.60 First year 1396.40 1452.30 1539.40 1616.40 Second year
Grade 6 1442.20 1499.90 1589.90 1669.40 First year 1465.10 1523.70 1615.10 1695.90 Second year
Grade 7 1556.50 1618.80 1715.90 1801.70 First year 1579.50 1642.70 1741.30 1828.40 Second year
Grade 8 1671.00 1737.80 1842.10 1934.20 First year 1693.80 1761.60 1867.30 1960.70 Second year
Grade 9 1785.40 1856.80 1968.20 2066.60 First year 1808.50 1880.80 1993.60 2093.30 Second year
Annexure B By adding Column 2 to Table 1 - Salaries in Part B of the Interim Award as follows:
Column 2* Classification 01/01/03 Per Week $ Assistant in Nursing - Under 18 years of age - 428.80 First year of experience 447.60 Second year of experience 465.60 Thereafter
18 years of age and over - 505.80 First year of experience 521.90 Second year of experience 538.30 Third year of experience 555.10 Thereafter Trainee enrolled nurse - Under 18 years of age - 428.80 First year of experience 447.60 Second year of experience 465.60 Thereafter
18 years and over - 505.80 First year of experience 521.90 Second year of experience 538.30 Third year of experience 555.10 Thereafter Enrolled Nurse 620.80 First year of experience 634.40 Second year of experience 648.10 Third year of experience 661.80 Fourth year of experience 675.60 Thereafter Enrolled Nurse - Special Grade 696.70 Residential Care Nurse - 605.70 First year of experience 617.90 Second year of experience 629.90 Third year of experience 644.40 Fourth year of experience 656.20 Thereafter Mothercraft Nurse - 667.40 First year of experience 688.70 Second year of experience 713.40 Third year of experience 737.50 Fourth year of experience 761.90 Fifth year of experience 787.10 Sixth year of experience 803.90 Seventh year of experience 821.70 Eighth year of experience 838.90 Ninth year of experience The mothercraft classification applies only to persons employed in this classification as at 31 December 1998. Persons employed after that date are classified as enrolled nurses. Nurses undergoing pre-registration training otherwise than as a student. 606.90 Registered Nurse - 703.80 First year of experience 742.20 Second year of experience 780.50 Third year of experience 821.50 Fourth year of experience 862.20 Fifth year of experience 903.00 Sixth year of experience 949.30 Seventh year of experience 988.50 Eighth year of experience Clinical Nurse Specialist 1028.80 Clinical Nurse Educator 1028.80 Nurse Educator - 1141.20 First year of experience 1173.30 Second year of experience 1202.10 Third year of experience 1264.90 Fourth year of experience Clinical Nurse Consultant 1264.90 (appointed prior to 31/12/99) Clinical Nurse Consultant Grade 1 1236.60 First year of experience 1261.70 Second year of experience Clinical Nurse Consultant Grade 2 1286.80 First year of experience 1312.30 Second year of experience Clinical Nurse Consultant Grade 3 1362.60 First year of experience 1388.00 Second year of experience Nurse Practitioner - 1362.60 First year of experience 1388.00 Second year of experience Nursing Unit Manager - 1239.90 Level 1 1298.90 Level 2 1333.70 Level 3 Nurse Manager - Grade 1 1236.60 First year 1261.70 Second year
Grade 2 1286.80 First year 1312.30 Second year
Grade 3 1362.60 First year 1388.00 Second year
Grade 4 1438.40 First year 1463.60 Second year Nurse Managers - Grade 5 1513.90 First year 1539.40 Second year
Grade 6 1589.90 First year 1615.10 Second year
Grade 7 1715.90 First year 1741.30 Second year
Grade 8 1842.10 First year 1867.30 Second year
Grade 9 1968.20 First year 1993.60 Second year
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